Inventory information for Part 311 of Sheridan Corp. discloses the following inf

Question

Inventory information for Part 311 of Sheridan Corp. discloses the following information for the month of June.

Inventory information for Part 311 of Sheridan Corp. discloses the following information for the month of June. (a) Assuming the periodic inventory method is used and costs are computed at the same time of the withdrawal, what is the value of the ending inventory LIFO? (b) Assuming the perpetual inventory method is used and costs are computed at the same time of the withdrawal, what is the gross profit if the inventory is valued at FIFO?

June 1 Balance 301 units @ $16 June 10 Sold 197 units @ $37 11 Purchased 797 units @ $19 15 Sold 498 units @ $39 20 Purchased 503 units @ $20 27 Sold 297 units @ $42

Explanation / Answer

LIFO-Periodic DATE Cost of goods available for sale Cost of Goods sold Closing inventory Units Rate Amount Units Rate Amount Units Rate Amount Beginning Inventory 301 16 4816 301 16 4816 Purchase 11-Jun 797 19 15143 489 19 9291 308 19 5852 20-Jun 503 20 10060 503 20 10060 TOTAL 1601 30019 992 7,455 609 10,668 Value of Ending Inventory (Under LIFO) = $ 10,668 FIFO-Perpetual DATE Cost of goods available for sale Cost of Goods sold Closing inventory Units Rate Amount Units Rate Amount Units Rate Amount Beginning Inventory 301 16 4816 301 16 4816 10-Jun 197 16 3152 104 16 1664 11-Jun 797 19 15143 104 16 1664 797 19 15143 15-Jun 104 16 1664 394 19 7486 403 19 7657 20-Jun 503 20 10060 403 19 7657 503 20 10060 27-Jun 297 19 5643 106 19 2014 503 20 10060 TOTAL 1601 30019 992 17,945 609 12,074 Gross Profit: Sales(197units@37 + 498 units@ 39+297 units@42) 39185 Less: Cost of goods sold 17945 GROSS PROFIT 21240

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